Of the poorest 10% of households, almost half now have more debts than assets.
That’s just so ludicrously stupid as an observation. Not only is it wrong – when measuring poorest by wealth it’s about all of the bottom 30% of households who have more debt than assets – it’s also entirely and wholly normal. Simply because we live in a society where it is possible to gain access to credit. Therefore those at the bottom of the asset pile will be those with more credit than assets.
This is also why when you compile a listing of the poorest – again by wealth, not income – globally the vast majority of those at the bottom are middle classish people in the rich nations. Students fresh out of university with their loan books.
No, really. Come out of Harvard with a Masters in summat and you might have $400k in debt. There’s no way some landless peasant in India is ever going to be lent that much. The landless peasant also looks forward to $2 a day for the rest of his life, that Harvard grad might be walking into a $100k a year job. But, by wealth, for this year and a couple, the Harvard grad is poorer, by wealth, than the man with nothing. That’s just how these numbers work.
None of this is accidental. Neoliberalism is sold to us as a means of enhancing freedom and choice, but in reality it’s about power. It shifts tax and regulation from those who are rich and powerful on to people who are poor and weak. The taxes the wealthy once paid have been transferred to those with far smaller resources.
That also doesn’t work. Because the tax burden these days is higher than it used to be. More of GDP, more of everything, is washed through taxes and government. Which is why the tax burden has reached down to the poorer – the rich are already plucked to the limit of the ability to do so therefore others must also be taken in order to pay for politics.
This is also untrue:
Neoliberalism promised that it would generate growth. The benefits of this growth would trickle from the rich to the poor, enhancing everyone’s conditions of life. But growth, for better or worse, has been slower globally during the neoliberal era than during the years before Thatcher, Reagan and their many imitators came to power. And it has been overwhelmingly captured by the very rich. Far from ensuring that money trickles down, neoliberalism is the pump that shifts wealth from the poor to the rich.
It’s tosh in fact.
Global inequality has been falling this past 40 years. Global poverty has not just been falling this past 40 years, it’s the greatest fall in absolute poverty in the entire history of our species.
It is true that the people who have bourne the brunt of this are the below median in rich countries. That roughly 80 to 90 % of the global income distribution.
But think on this for a moment. If you said to Geroge that we shouldn’t do something because the people who would stand still – become relatively less well off, even if they remain where they are in absolute terms – were those at the 80 to 90th percentile of the domestic income distribution then he’d shout “Fuck ‘Em” wouldn’t he? This policy will hit those earning – household income – say £60k to £120k (roughly, -ish, about right) the answer would be “Great!”.
Why isn’t this equally justifiable on the global numbers?
Even this definition is wrong:
Why? Because the doctrine destroying our condition of life is the doctrine Liz Truss has promised to extend to new extremes. She is fanatically devoted to an ideology misleadingly called Thatcherism or Reaganism (as if they invented it), but more accurately described as neoliberalism.
This doctrine insists that politics submits to “the market”, which means, when translated, that democracy must submit to the power of money. Any impediment to the accumulation of wealth – such as public ownership, tax, regulation, trade unions and political protest – should be torn down, either quickly and noisily or slowly and stealthily. When consumer choice is unencumbered by political interference, the market is allowed to become a Great Winnower, sifting us into a natural hierarchy of winners and losers.
The doctrine has religious, quasi-Calvinist aspects: in the kingdom of the market we can see who is deserving and who is undeserving through the grace bestowed upon them by the god of money. Any policy or protest that seeks to disrupt the formation of a natural order of rich and poor is an unwarranted stay upon the divine will of the invisible hand.
Describing me as a High Priest of neoliberalism would be a bit much – I’m not important enough for that. But I am a Senior Fellow at a think tank that proudly describes itself as neoliberal. Rather than issuing full blooded Hosannas my role might be issuing the occasional “,” in the hymnal text. But within that Church of Neoliberalism markets are simply a tool. They’re a tool that works well in doing some things, needs adjustment to work well in others and don’t work at all in a third group. A total free market in intellectual property – or other public goods because of their non-rivalrous, non-excludable nature – doesn’t work. In the sense of not producing what we out here, we peeps, desire.
The only difference between us and the most rigid statist, planner or scientific socialist – short of the Kim Young Un sorta level – is in allocating problems to those efficiently dealt with by markets, those requiring alterations and those that have to be addressed by other means.
Markets are simply a tool that works well at times and not at others. The trick is in working out which is which. This is why neoliberals are not anarcho capitalists.
Us neoliberals – and as that junior deacon in the cathedral I do know this – are simply observing what it is that humans desire. More. More lifespan, more food, more choices, a better longer life by the standards of those people doing the desiring. This includes more forests, more swamps (to limited extents perhaps, but more still) and more sunsets to gawp at. Humans are complex, with multiple desires. We then note that in much of life, but not all, market mechanisms produce what is desired. And really, that’s it.
Markets are often enough a useful tool to produce what humans desire. Thus we should use markets where they are just that, and not where they ain’t. That’s it, that’s neoliberalism.
And do note something that could be relevant. Judging by those results of that past 40 years in those charts above, neoliberalism works too. Ain’t that fun?